Brussels: Europe and the Arabs
The Council of Member States and the European Parliament reached a provisional agreement on a compulsory licensing regulation for crisis management purposes. Compulsory licensing is a crisis management tool for the European Union, allowing the use of intellectual property rights (i.e., patents) without the right holder's permission, to ensure the availability of essential products in the domestic market.
The provisional agreement reached Wednesday evening emphasizes that compulsory licensing is a last resort, leaves gas, microchips, and defense products outside the scope of the regulation, and ensures that there is no obligation to disclose trade secrets. "Following the agreement, Europe is better prepared to face future crises, while ensuring a high level of intellectual property protection," said Krzysztof Paszek, the Polish Minister for Economic Development and Technology, whose country currently holds the rotating EU Presidency.
Ensuring the supply of essential products
In crisis situations (such as epidemics or natural disasters), compulsory licensing can help provide access to key products and technologies, when, for example, the patent holder does not have the capacity to produce the necessary quantities of a key product, and voluntary agreements are not available or enforceable. Currently, compulsory licensing mechanisms are regulated only at the national level, which can lead to a fragmented approach in cross-border crises or emergencies. To address this problem, the Commission has proposed a regulation establishing an EU-wide compulsory licensing framework, which only comes into effect after an EU-wide emergency or crisis situation is invoked, in accordance with relevant crisis legislation (the proposal includes a list of laws that could trigger the compulsory licensing framework).
Voluntary agreements first
The agreement enshrines The interim agreement reached today emphasizes the nature of compulsory licensing as a last resort, prioritizing voluntary agreements between IP rights holders and potential license users in times of crisis. However, to avoid endless negotiations, voluntary agreements must be concluded within a reasonable timeframe; otherwise, compulsory licensing could be triggered.
The interim agreement reached with the European Parliament now needs to be formally endorsed and adopted by both institutions.
It is worth noting that in the wake of the COVID-19 crisis, the European Union has introduced several crisis response tools at the European level, such as the proposed regulation establishing a Single Market Emergency Instrument (SMEI, now known as IMERA) or the Council Regulation on a framework of measures to ensure the provision of medical countermeasures in the event of a public health emergency at the Union level. These tools provide the European Union with a means to ensure access and free movement of products needed to address crises in the internal market.
These tools focus on voluntary approaches, which are the most effective tool for enabling the rapid manufacture of patented products, including in times of crisis. However, in some cases, such agreements are not available. Whether voluntary or inappropriate, compulsory licensing can provide avenues for the rapid manufacture of products needed during crises.
The Commission proposed an initiative on compulsory licensing for crisis management on 27 April 2023. Parliament adopted its position on 13 March 2024, and the Council reached its negotiating mandate on 26 June 2024.